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Business Ethics
Cases, Issues, & Stakeholders
GEB 6445
University of South Florida
Business
create. mheducation.com
Copyright 2021 by McGraw-Hill Education. All rights reserved.
Print&d in the United States of America. Except as permiHed under the United Slates Copytight
Act of 1976, no part of this pvbUcation may be reproduced or distributed in any form or by any
means. or stored in a database or retrieval system, without p(ior written permission of the
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This McGraw-Hill Create text may include materials submitted to McGraw-Hill for publication by
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materials. Instructors retain copyright o f these addrtional materials.
ISBN-13: 9781307768916
ISBN-1 0: 1307768911
Contents
CHAPTER 1: THE STUDY OF BUSINESS, GOVERNMENT, &
SOCIETY ....... ...... ........ ..... ........ ..... ........ ..... ........ ..... . 1
THE STUDY OF BUSINESS, GOVERNMENT, AND SOCIETY . . ...... . ..... .. ..... . 3
CHAPTER 2: THE DYNAMIC ENVIRONMENT ..... . . . . . 25

THE DYNMUC ENVIRONMENT ....... ...... ....... ...... ....... ...... ....... .26
CHAPTER 3: BUSINESS POWER . ..... ..... . ... 59

BUSINESS POWER ......... ..... ......... .... ........ ..... ......... ..... ..... 61
CHAPTER 4: CRITICS OF BUSINESS . ..... ..... . . . . . . . 89

CRITICS OF BUSINESS ..... . ..... ....... . ..... . ....... ..... . ....... . ..... .... 91
CHAPTER 5: IMPLEMENTING SOCIAL RESPONSIBILITY ........... 129

I,\,lPLE.VlENTING CORPORATE SOCIAL RESPONSIBILITY .... .... . . ...... . .... 131
CHAPTER 6: ORGANIZATIONAL ETHICS . . . . . . . . . . . . ... .. . . . . . .. .... 169

ORGANIZATIONAL ETHICS .. .. . . . . ...... .... . . . . ........ . . . . . ......... ..... .171
Workp/ac,Safety atAJcoa ( B) ...... .••. ..•.....• .•••• ......... •••• .•.....•. •••. ...... /91
CHAPTER 7: MAKING ETHICAL DECISIONS IN BUSINESS .... ..... . 199

MAKING ETHICAL DECISIONS IN BUSINESS . ..... . ...... . ..... .. ..... . . . .... 200
iii
CHAPTER 8: BUSINESS IN POLITICS & INFLUENCING THE
POLmCAL ENVIRONMENT ..... .. ..... . ..... .. ...... ...... ....... .....233
BUSINESS IN POLITICS .... ...... ....... ....... ...... ....... ...... ....... ... 235
Influencing tht Pol/Ilea/ Environment ..... . ..... . ...... . ...... ...... • ...... . ..... • . • .... . 181
CHAPTER 9: SUSTAINABILITY, SUSTAINABLE

DEVELOPMENT, & GLOBAL BUSINESS . . . . . ... ...... . .... ... ..... . ..307
SUSTAINABLE DEVELOPMENT AND GLOBAL BUSINESS ..... ....... ...... ....308
CHAPTER 10: MANAGING FOR SUSTAINABILITY . . . . . . . . . . . . 331

MANAGING FOR SUSTAINABILITY ... ....... ....... ....... ...... ....... ......333
CHAPTER 11: MULTINATIONAL CORPORATIONS &

GOVERNMENT RELATIONSIDPS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 359
MULTINATIONAL CORPORATIONS . . ..... .. ..... . ...... . ..... . ...... . ...... . 360
CHAPTER 12: GLOBALIZATION AND BGS RELATIONSIDPS .. ...... 403

GLOBALIZATION, TRADE, AND CORRUPTION ...... ....... ...... ...... ....... 405
The Carlson OJmpany and Protecting Ot/ldnn In the Global Tourism JnduSJry .... ..... ........ ...... . 446
CHAPTER 13: REGULATING AND MANAGING INFORMATION

TECHNOLOGY . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... ........ ...... ....... ..... 455
REGULATING AND MANAGING TECHNOLOGY .. . ...... . ..... . ...... . ..... .. . 457
CHAPTER 14: CONSUMERISM.... .... ..... .477

CONSUMERISl\-1 ............................................................ 478
CHAPTER 15: INDUSTRIAL POLLUTION AND ENVIRONMENTAL

POLICY . . . . . . . . 515
INDUSTRIAL POLLUTION AND ENVIRONMENTAL REGULATION . .. ...... . .... 516
iv
CHAPTER 16: MANAGING ENVIRONMENTAL QUALITY . ..... .. .... 557
MANAGING ENVIRONMENTAL QUALITY .. . . ...... ...... ...... . . ...... .......558
The Up~r Big Branch Mine Disaster . ...... ........ ..... ........ ..... ......... ..... ..... 594
CHAPTER 17: THE CHANGING WORKPLACE & EMPLOYEES AND

THE CORPORATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 605
THE CHANGING \VORKPLACE ... . ..... .. . .... .. .... .. ..... .. ..... . ...... . ...607
Employee.s and 1he CtJrporatlon .... ••••• ........ ••••• ......... ••••• ........ ••••• ...... .643
CHAPTER 18: CML RIGHTS AT WORK & MANAGING A

DIVERSE WORKFORCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 667
CIVIL RIGHTS, WOIVIEN, AND DIVERSITY .... . .... . . . ..... . . . .. . . . . .... . ..... 669
Managing a Dh+tne Workfortt ....... ..... .. ...... .... • . • ..... • . • ..•. • . • ... • . • .... .. .. 7I 4
JPA1organ l ~hast 's Path l'Orward .... ...... ...... • . •.•.. ...... • . •..... . • ..... •..... .... .738
bu:J"st,·t Jnnovallon al Mass General Brigham .. , , , ... • . •. . .. , , , ... • . •. . .. , , , ..... •..... , , . .77I
Credits . ...... ....... ...... ........ ..... .. ..... . • ..... ....... • ..... ....... • .... 79 1
V
1
CHAPTER 1: The Study of

Business, Government, &
Society
Business. Government, and Society: A Managerial Perspective, Text and <:.ises. 13th Edition 3
The Study of Business,

Government, and
Society
ExxonMobil Corporation
ExxonMobil is a colossus. In 2010 it had revenues of $370 billion and net income of
$29 billion. To put this in perspective, it had five times t he sales of Microsoft; its
prof its equaled the total sales of Nike. It paid $89 billion in taxes, a sum exceedi ng
t he combined revenues of Microsoft and Nike. ExxonMobil employs 84,000 people,
most in the 143 subsidiaries it uses for its operations. Its main business is discovering,
producing, and selling oil and natural gas, and it has a long record of profiting more
at this busi ness than its rivals.
The company cannot be well understood apart from its history. It descends from
the Standard Oil Trust, incorporated in 1882 by John D. Rockefeller as Standard Oil of
New Jersey. Rockefeller was a quiet, meticulous, secretive manager, a relentless com•
petitor, and a pai nstaking accountant who obsessed over every detail of strategy and
every penny of cost and earnings. He believed that the end of imposing order on a
yout hful, rowdy oil industry justified the use of ruthless means.
As Standard Oil grew, Rockefeller's values defined the company's culture; that is,
t he shared assumptions, both spoken and unspoken, that animate its employees. If
t he values of a founder such as Rockefeller are effective, they become embedded
over t ime in the organization. Once widely shared, they tend to be exceptionally
long-lived and stable.' Rockefeller emphasized cost control, efficiency, centralized
organization, and suppression of competitors. And no set of principles was ever more
triumphant. Standard Oil once had more t han 90 percent of the American oil market.
Standard Oil's power so offended public values t hat in 1890 Congress passed the
Sherman Ant itrust Act to out law its monopoly. In 1911 , after years of legal battles, the
trust was finally broken into 39 separate companies.2 After the breakup, Standard Oil
1 See, for example, Edgar H. Schein, The Corporate Culture Survival Guide, rev. ed. (San Francisco: Jossey-Bass,
2009), part one.
2 Standard Oil Co. of New Jersey v. United States, 221 U.S. 1 (19 11).
1
4 Business Ethics: Cases. Issues & Stakehoklers
2 Chapter 1 The Study of Business, Government and Society
of New Jersey continued to exist. Although it had shed 57 percent of its assets to
create t he new firms, it was still t he world's largest oil company. Some companies
formed in t he breakup were Standard Oil of Indiana (later renamed Amoco),
Atlantic Ref ining (ARCO), Standard Oil of California (Chevron), Continental Oil
(Conoco), Standard Oil of Ohio (Sohio), Chesebrough-Pond's (a company that made
petroleum jelly), and Standard Oil of New York (Mobil). In 1972 Standard Oil of
New Jersey changed its name to Exxon, and in 1999 it merged with Mobil, forming
Exxon Mobil.
The passage of time now obscures Rockefeller's influence, bu t ExxonMobil's
actions remain consistent with his nature. It has a centralized, authoritarian culture.
Profit is an overrid ing goal. Every project must meet strict criteria for return on capital.
ExxonMobil consistently betters industry rivals in its favorite measure, return on aver-
age capital employed.
Unlike Southwest Ai rlines or Google, w here having f un is part of the job, perform-
ance pressure at ExxonMobil is so intense that it " is not a fun place to work. " 3 As
Rockefeller bought competitors, he kept only the best managers from their ranks.
Today managers at ExxonMobil face a Darwinian promotion system t hat weeds out
anyone w ho is not a top performer. "We put them through a big distillation column,"
said a former CEO, and "only the top of the column stays there."• And oil industry
competitors still find it a ferocious adversary. The company says simply that it "employs
all methods of competition which are lawful and appropriate." 5
Although ExxonMobil is a powerful corporation, it is no longer the command ing
trust of Rockefeller's era. As in the old days, its power is challenged and limited by
economic, political, and social forces. Now, however, these forces are more leveling.
Markets are more contested. ExxonMobil pumps only 8 percent of t he world's
daily output of oil and controls less than 2 percent of petroleum reserves. These f ig-
ures are far lower than in the 1950s when Exxon was t he largest of the Seven Sisters,
a group of Western oil f irms that dominated global production and reserves, includ-
ing t he huge Midd le East oil f ields.6 Now its largest competitors are seven state-
owned oil companies, often called t he new Seven Sisters, whose output dwarfs t hat
of today's privately owned companies.7 The biggest, Saud i Aramco, is 3.5 times the
size of ExxonMobil in daily crude oil output and has 32 t imes its reserves.8 The rise of
these state-owned companies reflects a new form of nationalism, one that rejects
reliance on foreign firms to exploit natural resources.
3Fadel Gheit, a former employee and an oil industry analyst, quoted in Geoff Colvin, "The Defiant One,,.
Fortune, April 30, 2007, p. 88.
• Lee Raym ond, quoted in Tom Bo wer, Oil: Money, Politics, and Prwver in the 2 1st Century (New York:
Grand Central Publishing, 2009), p. 162 .
5 Exxon Mobil Corporation, Form 10-K 2009, filed with the Securities and Exchange Commission,
February 26, 2010, p. 1.
6 The Seven Sisters were Exxon, Mobil. Shell, British Petroleum, Gulf, Texaco, and Chevron.
1 The new Seven Sisters are Saudi Aramco {Saudi Arabia), Gazprom (Russia), China National Petroleum
Company (China), National Iranian Oil Company (Iran), Petr61eos de Venezuela S. A. (Venezuela),
Petrobras (Brazil), and Petronas (Malaysia).
• Government Accountability Office, Crude Oil, GA0-07-283, February 2007, fig. 9; and Ian Brem mer,
"The Long Shadow of the Visible Hand," The Wall Street Jouma/, M ay 22- 23, 20 10, p. W3.
Chapter 1 The Study of Business, Government, and Sodety 3
ExxonMobil is on a t readmill, constantly searchi ng for new oil and natural gas
supplies to compensate for declining production in existing fields. Output from a
mat ure field drops 5 to 8 percent a year. To maintain profitability the company
pursues new reserves wherever they are, taki ng political risks and abiding unrest and
corruption. Iran and Venezuela have expropriated its assets. In Indonesia, govern-
ment t roops guard its f acilities against attacks by rebel forces. In Chad, Angola,
Nigeria, and Equatorial Guinea, it has paid dictators for access to oil.
Governments are more active and relations with them, ranging from high-level
diplomacy to mundane regulatory compliance, are more complex t han in the past. In
2003 the company engaged in a high-stakes game of political intrigue tryi ng to pur-
chase Yukos Oil Company. Yukos was a technologically backward Russian company
t hat controlled oil and gas deposits in Siberia so huge they would double Exxon-
Mobil's reserves. ExxonMobil wanted it badly and offered $45 billion to t he Russian
capitalists who owned it. Their leader was billionaire Mikhail Khodorkovsky, a political
rival of Russia's President Vladimir Putin. Khodorkovsky promised ExxonMobil t hat he
would use his political influence to clear t he deal, but when its top managers met
with Putin he was guarded and said, "These details are for my ministers. You must
deal with them. " 9 Soon, Khodorkovsky's private jet was mysteriously delayed from
taki ng off at a Siberian airfield and boarded by masked police, who arrested him on
charges of fraud and tax evasion. He has been in jail ever since. Yukos soon merged
with a state-owned oil company managed by one of Putin's close allies.
In more ordi nary ways, webs of law and regulation dictate ExxonMobil's opera-
tions in each count ry where it does business. In the United States alone approximately
200 federal departments, commissions, agencies, offices, and bureaus, only a hand•
ful of which existed in Rockefeller's day, impose rules on the company. If the founder
were alive, he might find this tight supervision unrecognizable- even incredible. For
example, in 2009 the company paid a $600,000 f ine to settle charges that 85 migra-
tory bi rds in five states died of hyd rocarbon exposure after landi ng in production and
wastewater ponds. It agreed to a $2.5 million bird protection program. It will put nets
over ponds and install electronic systems that turn on flashing lights and noisemakers
when t hey detect incoming f lights of birds. 10
ExxonMobil also faces a demanding social envi ronment. As a leader in the world's
largest industry, it is closely watched by environmental, civil rights, labor, and con-
sumer groups-some of which are actively hostile. For years t he company agitated
environmentalists by reject ing the scientific case for global warming. Alone among
major oil companies, it ref used to make significant investments in renewable energy.
Its former CEO called such investments "a complete waste of money." 11
In 2006 a new CEO, Rex Tillerson, tried to blunt criticism by granting publicly
t hat t he world is warming. But he made no changes in strategy. A group of John
D. Rockefeller's heirs, believing that ExxonMobil no longer represented the "forward-
looking" spirit of its great founder, wrote to Tillerson, welcomi ng him as t he new
9 Quoted in Tom Bower, Oil: Money, Politics, and Power in the 2 1st Century, p. 10.
10 United States Attorney's Office, District of Colorado, " Exxon-Mobil Pleads Guilty to Killing M igratory
Birds in Five States,,. press release, August 13, 2009.

11 Lee Raymond, quoted in "The Unrepentant Oilman,· The Economist March 15, 2003, p. 64.
leader and req uesting a meeting. 12 He would not meet with them. Subsequently,
66 Rockefeller descendants signed an initiative calling on the company to convene a
climate change task force. The company refused to talk with t he family members,
who held only 0.006 percent of its shares. 13
Besides using ethanol blends in gasoline, ExxonMobil's major investment in alternative
energy is a $600 million research project to make biofuels from algae.•• That investment
pales in comparison with its $27 billion in capital and exploration expenditures in 2009
and a $30 billion project nearing completion to liquefy and ship natural gas from Qatar.
As a corporate citizen ExxonMobil funds worldwide programs to benefit communi-
ties, nature, and the arts. Its largest contributions, about 50 percent of t he total, go
to education. Other efforts range from $68 million to fight malaria in Africa to $5,000
for t he National Cowgirl Museum in Fort Worth, Texas. In 2009 ExxonMobil gave
$196 million to such efforts. This is a large sum from the perspective of an individual.
However, for ExxonMobil it was seven-hundredths of 1 percent of its revenues, the
equivalent of a person making $ 1 million a year giving $7 to charity. Does this giving
live up to the elegant example of founder John D. Rockefeller, t he great philanthro-
pist of his era?
The story of ExxonMobil raises central questions about the role of business in
society. When is a corporation socially responsible? How can managers know their
responsibilities? What actions are ethical or unethical? How responsive must a corpo-
ration be to its critics? This book is a journey into t he criteria for answering such
questions. As a begi nning for t his fi rst chapter, however, the story illustrates a range
of interactions between one large corporation and many nations and social forces.
Such busi ness- government-society interactions are innumerable and complicated.
In the chapter that f ollows we try t o order the universe of t hese interactions by
introducing four basic models of the business-government-society relationship. In
addition, we def ine basic terms and explai n our approach to the subject matter.
WHAT IS THE BUSINESS-GOVERNMENT-SOCIETY FIELD?

In the universe of human endeavor, we can distinguish subdivisions of economic,
political, and social activity-that is, business, government, and society-in every
civilization throughout time. Interplay among these activities creates an environ-
ment in which businesses operate. The business-government-society (BGS) field is
the study of this environment and its importance for managers.
business To begin, we define the basic terms.
Profit-making Business is a broad term encompassing a range of actions and institutions. It
activily lhat covers management, manufacturing, finance, trade, service, investment, and other
provides prod-
ucts and ser- activities. Entities as different as a hamburger stand and a giant corporation are
vices to satisfy businesses. The fundamental purpose of every business is to make a profit by
human needs. providing products and services that satisfy human needs.
12 Daniel Gross, .. There Will Be Blood Orange Juice,· Slate, April 30, 2008.
,, lad Mouawad, .. Can Rockefeller Heirs Turn Exxon Greener?.. The New York Times, May 4, 2008, p. 82.
14 •• ExxonMobil Invests in Algae for Biofuel, .. Nature, July 2009, p. 449.
government Government refers to structures and processes in society that authoritatively

Structures and make and apply policies and rules. Like business, it encompasses a wide range of
processes in activities and institutions at many levels, from international to local. The focus of
society that
authoritatively this book is on the economic and regulatory powers of government as they affect
make and business.
apply policies A society is a cooperative network of human relations, organized by flows of
and rules. power and relatively distinct in its boundaries from other, analogous networks. 15
sodety Every society includes three interacting elements: (1) ideas, (2) institutions, and
A network of (3) material things.
human relations Ideas, or intangible objects of thought, include values and ideologies. Values are
composed of enduring beliefs about which fundamental choices in personal and social life are
ideas, institu-
correct. Cultural habits and norms are based on values. Ideologies are bundles of
tions, and
material things. values that create a worldvie·w. They establish the meaning of life or categories of
experience by defining 1Nhat is considered good, true, right, beautiful, and accept-
idea able. Sacred ideologies, or theologies, include the great religions that define
An intangible human experience in relation to a deity. Secular ideologies, such as democracy,
object of
thought.
liberalism, capitalism, socialism, or ethics, all of which will be discussed in this
book as they relate to business, explain human experience in a visible world, a
value world ordered by values based on reason, not faith. The two kinds of ideology can
An enduring overlap, as 1',jth ethics, an ideology rooted in both faith and reason. All ideologies
belief about
which funda- have the power to organize collective activity. Ideas shape every institution in
mental life society, sometimes coming in conflict as when capitalism's practiced values of
choices are exploitation, ruthless competition, self-interest, and short-term gain abrade values
correct of love, mercy, charity, and patience in Christianity.
ideology lnstituNons are formal patterns of relations that link people to accomplish a
A bundle of goal. They are essential to coordinate the work of individuals having no direct
values that relationship ",jth each other. 16 In modern societies, economic, political, cultural,
creates a partic- legal, religious, military, educational, media, and familial institutions are salient.
ular view of There are multiple economic institutions such as financial institutions, the corpo-
the world.
rate form, and markets. Collectively, we call these business.
institution As Figure 1.1 shows, markets are supported by a range of institutions. Capital-
A formal pat- ism has wide variation in nations where it abides because supporting institutions
tern of relations grow from unique historical and cultural roots. In developed nations these institu-
that links peo-
ple to accom- tions are highly evolved and mutually supportive. Where they are weak, markets
plish a goal. work in dysfunctional ways. An example is the story of Russia, which introduced
a market economy after the fall of communism in the early 1990s. In the old sys-
tem workers spent lifetimes in secure jobs at state-owned firms. There was no un-
employment insurance and, because few workers ever moved, housing markets
were undeveloped. A free market economy requires a strong labor market, so
workers can switch from jobs in declining firms to jobs in expanding ones. But
Russia's labor market was undeveloped. Because the government did not yet
1 s See Michael Mann, The Sources of Social Power, vol. I: A History of Power from the Beginning to A.O.
7760 (New York: Cambridge University Press, 1986), pp. 1- 3.
16 Arnold J. Toynbee, A Study of History, vol. XII, Reconsiderations (London: Oxford University Press,
1961), p. 270.
a Business Ethics: Cases. Issues & Stakehoklers
FIGURE 1.1 How Institutions Support Markets
JUDICIAL
Protect properly
rights, encourage
REGULATORY investment by making FINANCIAL
dispute resolution
predictable.
Protect the public
Mobilize capital for
and investors from saving, borrowing,
d ishonesty, danger,
l
and lending.
and fraud.
POLITICAL THE CORPORATIONS
Make economic
policy. collect tO>Ces,
provid e social sa1ety
nets. check and balance
business power.
:::--::::
MARKET
J -- Combine capital and

labor, encourage risk
by limiting liability, and
have continuity beyond
individual lives.
\
CULTURAL MEDIA
Impart values. habits, Inform the public

and norms in famity, and stimulate
religious, or educational commerce with
institutions. advertising.
provide unemployment benefits to idled workers, there was no safety net. And
housing markets were anemic. Company managers, out of basic humanity, were
unwilling to lay off workers who would get no benefits and who would find it
difficult to move elsewhere. 17 As a result, restructuring in the new Russian
economy was torpid. The lesson is that institutions are vital to markets.
Each institution has a Sp€Cific purpose in society. The function of business is to
make a profit by producing goods and services at prices attractive to consumers.
A business uses the resources of society to create new wealth. This justifies its ex-
istence and is its priority task. All other social tasks-raising an army, advancing
knowledge, healing the sick, or raising children~epend on it. Businesses must,
17 Joseph E. Stiglitz, Globalization and Its Discontents (New York: W. W. Norton, 2002), p. 140.
therefore, be managed to make a profit. A categorical statement of this point comes

from Peter Drucker: "Business management must always, in every decision and
action put economic performance first." 18 Without profit, business fails in its duty
to society and lacks legitimacy.
material The third element in society is material t/Jings, including land, natural resources,
things infrastructure, and manufactured goods. These shape and, in the case of fabricated
Tangible arti- objects, are par tly products of ideas and institutions. Economic institutions,
facts of a society
together with the extent of resources, largely determine the type and quantity of
that shape and
are shaped society's material goods.
by ideas and The BGS field is the study of interactions among the three broad areas defined
institutions. above. Its primary focus is on the interaction of business with the other two ele-
ments. The basic subject matter, therefore, is how business shapes and changes
government and society, and how it, in turn, is molded by political and social pres-
sures. Of special interest is how forces in the BGS nexus affect the manager's task.
WHY IS THE BGS FIELD IMPORTANT TO MANAGERS?

To succeed in meeting its objectives, a business must be responsive to both its eco-
nomic and its noneconomic environment. 19 ExxonMobil, for example, must effi-
ciently discover, refine, transport, and market energy. Yet swift response to market
forces is not always enough. There are powerful nonmarket forces to which many
businesses, especially large ones, are exposed. Their importance is clear in the two
dramatic episodes that punctuate ExxonMobil's history-the 1911 court-ordered
breakup and the 1989 Exxon Valdez oil spill.
fn 1911 the Supreme Court, in a decision that reflected public opinion as well
as interpretation of the Jaw, forced Standard Oil to conform with social values
favoring open, competitive markets. With unparalleled managerial genius,
courage, and perspicacity, John D. Rockefeller and his lieutenants had built a
wonder of efficiency that spread fuel and light throughout America at lower
cost than otherwise would have prevailed. They never understood why this
remarkable commercial performance was not the full measure of Standard Oil.
But beyond efficiency, the public demanded fair play. Thus, the great company
was dismembered.
fn Alaska, one of the company's massive tankers spilled 11 million gallons of
crude oil ·when its captain, having consumed enough vodka "to make most people
unconscious," quit the bridge during a critical maneuver. Left alone, an unlicenced
third mate ran onto a reef in pristine, picturesque Prince William Sound. 20 The
captain was an alcoholic, lately returned to command after a treatment program,
but known to have relapsed, drinking in hotels, bars, restaurants, parking Jots,
and even with Exxon officials. Although the company had a clear policy against
1• Management: Tasks-Responsibilities-Practices (New York: Harper & Row, 1973), p. 40.

19 For discussion of this distinction see Jean J. Bodde-vvyn, "Understanding and Advancing the Concept of
'Nonmarket."' Business & Society, September 2003.
20 In re: the Exxon Valdez, 270 F.3rd 1238 (2001 ).
use of alcohol by its crews, managers failed to monitor him. Years later, the United
States Supreme Court would call this lapse "worse than negligent but Jess than
malicious. " 21
The disaster brought acute legal, political, and image problems for the firm. It
spent $2.4 billion to clean up the spill and another $2.2 billion to settle lawsuits
that dragged on for 20 years, Congress passed a Jaw barring its ship from ever
again entering the area, and activists told motorists to get their gas from other
companies.22 Today ExxonMobil operates its 650 tankers with extreme care and
randomly tests crews for drugs and alcohol. Remarkably, it is now so disciplined
that it measures oil spills from its fleet in tablespoons per million gallons shipped.
Between 2006 and 2009 it averaged fewer than five tablespoons Jost per million
gallons shipped.23
Recognizing that a company operates not only within markets but also within a
society is critical. If the society, or one or more powerful elements within it, fails to
accept a company's actions, that firm will be punished and constrained. Put philo-
social sophically, a basic agreement or social con.tract exists between economic institutions
contract and other networks of power in a society. This contract establishes the general du-
An under lying ties that business must fulfill to retain the support and acquiescence of the others
agreement be-
tween business
as it organizes people, exploits nature, and moves markets. It is partly expressed
and society on in Jaw, but it also resides in social values.
basic duties Unfortunately for managers, the social contract, while unequivocal, is not plain,
and responsi- fixed, precise, or concrete. It is as complex and ambiguous as the economic forces
bilities business a business faces and no Jess difficult to comprehend. For example, the public be-
must carry out
to retain public
lieves that business has social responsibilities beyond making profits and obeying
support. It may regulations. If business does not meet them, it will suffer. But precisely what are
be reflected those responsibilities? How is corporate social performance to be measured? To
in laws and what extent must a business comply with unlegislated ethical values? When meet-
regulations. ing social expectations beyond the Jaw conflicts with raising profits, what is the
priority? Despite these questions, the social contract codifies the expectations of
society, and managers who ignore, misread, or violate it court disaster.
FOUR MODELS OF THE BGS RELATIONSHIP

Interactions among business, government, and society are infinite and their mean-
ing is open to interpretation. Faced ·with this complexity, many people use simple
mental models to impose order and meaning on what they observe. These models
are like prisms, each having a different refractive quality, each giving the holder a
different view of the world. Depending on the model (or prism) used, a person
21 Exxon Shipping Company v. Baker, 128 S.Ct. 2631 (2008).

22 The $2.4 billion includes $303 million in voluntary payments to nearby residents for economic k>sses.
The $2.2 billion figure includes criminal and civil fines, civil settlements, interest, and $500 million in
punitive damages imposed by a federal jury. The law was a provision in the Oil Protection Act of 1990.
23 "Changes ExxonMobil Has Made to Prevent Another Accident Like Valdez," at www.exxonmobil.com1
Corporate/about_issues_valdez_prevention.aspx, accessed October 1, 2009.
will think differently about the scope of business power in society, criteria for
managerial decisions, the extent of corporate responsibility, the ethical duties of
managers, and the need for regulation.
The following four models are basic alternatives for seeing the BGS relation-
market ship. As abstractions they oversimplify reality and magnify central issues. Each
economy model can be both descriptive and prescriptive; that is, it can be both an explana-
The economy tion of how the BGS relationship does work and, in addition, an ideal about how
that emerges it should work.
when people
move beyond
subsistence The Market Capitalism Model
production to The market capitalism model, shown in Figure 1.2, depicts business as operating
production
for trade, and within a market environment, responding primarily to powerful economic forces.
markets take There, it is substantially sheltered from direct impact by social and political forces.
on a more The market acts as a buffer between business and nonmarket forces. To appreciate
central role. this model, it is important to understand the history and nature of markets and the
capitalism classic explanation of how they work.
An economic Markets are as old as humanity, but for most of recorded history they were a
ideology with minor institution. People produced mainly for subsistence, not to trade. Then, in
a bundle of val- the 1700s, some economies began to expand and industrialize, division of labor
ues including developed within them, and people started to produce more for trade. As trade
private owner-
s hip of means grew, the market, through its price signals, took on a more central role in directing
of production, the creation and distribution of goods. The advent of this kind of market economy,
the profit or an economy in which markets play a major role, reshaped human life.
motive, free The classic explanation of how a market economy works comes from the Scottish
competition., professor of moral philosophy Adam Smith (1723-1790). In his extraordinary
and limited
government
treatise, The Wealth of NaN.ons, Smith wrote about what he called "commercial
restraint in society" or what today we call capitalism. He never used that word. It was adopted
markets. later by the philosopher Karl Marx (1818-1883), who contrived it as a term of
FIGURE 1.2
The Market Sociopolitic a l Environment
Capitalism
Model - .. Market Environment - ..
BUSINESS
..
V
10 Chapter 1 The Study of Business, Government, and Society
Full Production
andFu/lEm-
p/oymont under
Our Democratic
System of Pri-
....
vate Enterprise,
ca. 1944, a
uayon and ink
drawing by
Michael Lanson.
an artist work-
ing for tho
Works Progn,ss
Administration
Federal Art
Project. l.enson
focuses on the
virtues of mar-
ke1 capiU!lism.
Source: The
Library of Con-
gress. C, Barry
Lenson, used pointed insult. But it caught on and soon Jost its negative connotation.24 Smith
with permission.
said the desire to trade for mutual advantage lay deep in human instinct. He noted
the growing division of labor in society Jed more people to try to satisfy their
self-interests by specializing their work, then exchanging goods with each other.
As they did so, the market's pricing mechanism reconciled supply and demand,
and its ceaseless tendency was to make commodities cheaper, better, and more
available.
The beauty of this process, according to Smith, was that it coordinated the
activities of strangers who, to pursue their selfish advantage, were forced to ful-
fill the needs of others. In Smith's words, each trader was "led by an invisible
hand to promote an end which was no part of his intention," the collective good
of society.25 Through markets that harnessed the constant energy of greed for the
public welfare, Smith believed that nations would achieve "universal opulence."
managerial His genius was to demystify the way markets work, to frame market capitalism
capitalism
A market econ-
in moral terms, to extol its virtues, and to give it lasting justification as a source
omy in which
of human progress. The greater good for society came when businesses com-
the dominant peted freely.
businesses are In Smith's day producers and sellers were individuals and small businesses
large firms run managed by their owners. Later, by the late 1800s and early 1900s, throughout the
by salaried
industrialized world, the type of economy described by Smith had evolved into a
managers., not
smaller firms system of managerial capitalism. In it the innumerable, small, owner-run firms that
run by owner- animated Smith's marketplace were overshadowed by a much smaller number of
entrepreneurs. dominant corporations run by hierarchies of salaried managers.26 These managers
24 Jerry Z.Muller, The Mind and the Market: Capitalism in Modern European Thought (New Yo,k: Knopf,
2002), p. xvi.
2S Adam Smith, The Wealth of Nations, ed. E. Cannan (New Yo,k: Modem Library, 1937), Book II/, chap. 11,
p. 423. First published in 1776.
26 Alfred D. Chandler, Jr., "The Emergence of Managerial Capitalism," Business History Review, winter
1984, p. 473.
Chapter 1 The Study of Business, Government, and Society 11
had limited ov.'11ership in their companies and worked for shareholders. This
variant of capitalism has now spread throughout the world.
The model incorporates important assumptions. One is that government inter-
laissez-faire ference in economic life is slight. This is called laissez-faire, a term first used by the
An economic French to mean that government should "Jet us alone." It stands for the belief that
philosophy that government intervention in the market is undesirable. It is costly because it
rejects govern-
ment interven- lessens the efficiency with which free enterprise operates to benefit customers. It is
tion in markets. unnecessary because market forces are benevolent and, if liberated, will channel
economic resources to meet society's needs. It is for governments, not businesses,
to correct social problems. Therefore, managers should define company interests
narrowly, as profitability and efficiency.
Another assumption is that individuals can own private property and freely
risk investments. Under these circumstances, business owners are powerfully
motivated to make a profit. If free competition exists, the market ""ill hold profits
to a minimum and the quality of products and services will rise as competing
firms try to attract more buyers. If one tries to increase profits by charging higher
prices, consumers will go to another. If one producer makes higher-quality prod-
ucts, others must follow. In this way, markets convert selfish competition into
broad social benefits.
Other assumptions include these: Consumers are informed about products
and prices and make rational decisions. Moral restraint accompanies the self-
interested behavior of business. Basic institutions such as banking and Jaws exist
to ease commerce. There are many producers and consumers in competitive
markets.
The perspective of the market capitalism model leads to these conclusions
about the BGS relationship: (1) government regulation should be limited, (2) mar-
kets will discipline private economic activity to promote social welfare, (3) the
proper measure of corporate performance is profit, and (4) the ethical duty of
management is to promote the interests of owners and investors. These tenets of
market capitalism have shaped economic values in the industrialized West and, as
markets spread, they do so increasingly elsewhere.
There are many critics of capitalism and the market capitalism model. Bernard
Mandeville (1670-1733), an intellect predating Adam Smith, argued that markets
erode virtue. The envy, avarice, self-Jove, and ruthlessness that energize them are
base values driving out virtues such as Jove, friendship, and compassion.27 Karl
Marx believed that owners of capital exploited workers and promoted systems of
rising inequality. The communist Vladimir Lenin (1870-1924) wrote that industri-
alists masterminded imperial foreign policies to effect a "territorial division of
the whole world among the greatest capitalist powers."28 Pope John Paul II
(1920-2005) feared that markets place too much emphasis on money and material
objects and cautioned against a "domination of things over people."29
27 See George Bragues, "Business Is One Thing, Ethics Is Another: Revisiting Bernard Mandeville's The
Fable of the Bees, · Business Ethics Quarterly. April 2005.
28 V. I. Lenin, lmpenalism: The Highest Stage of Capitalism (New York: International Publishers, 1939), p. 89.
29 loannes Paulus PP.II, Encyclical Letter, Centesimus annus (May 1, 1991), no. 33.
Such critics see a Jong list of flaws that often, perhaps inevitably, appear in mar-
kets. Without correction the market amplifies blemishes of human nature and the
result is conspiracies, monopolies, frauds, pollution, and dangerous products.
Business models arise to satisfy vices such as adultery, gossiping, gambling, smok-
ing, drug use, and prostitution. Calls for corporate social responsibility and more
ethical managerial behavior stem from the inevitability of capitalism's flaws. As
promised by its defenders, capitalism has created material progress. Yet its dark
side is unremitting.
Denunciations of capitalism are pronounced today, but none are ne·w. They
carry on a regular attack that winds through the Western intellectual tradition.
Adam Smith himself had some reservations and second thoughts. He feared both
physical and moral decline in factory workers and the unwarranted idolization of
the rich, who might have earned their wealth by unvirtuous methods. In his later
years, he grew to see more need for government intervention. But Smith never
envisioned a system based solely on greed and self-interest. He exp€Cted that in
society these traits must coexist with restraint and benevolence.30
The ageless debate over whether capitalism is the best means to human fulfill-
ment will continue. Meanwhile, we tum our discussion to an alternative model of
the BGS relationship that attracts many of capitalism's detractors.
The Dominance Model

The dominance model is a second basic way of seeing the BGS relationship. It rep-
resents primarily the perspective of business critics. In it, business and govern-
ment dominate the great mass of people. This idea is represented in the pyramidal,
hierarchical image of society shown in Figure 1.3.
FIGURE 1.3 Environmental Forces

The
Dominance
Model
M osses
30 E.G. West. ed., The 71,eo,yof Moral Sentiments Qndianapolis: Liberty Classics. 1976), pp. 70-72.
Originally published in 1853.
Those who subscribe to the model believe that corporations and a powerful
elite control a system that enriches a few at the expense of the many. Such a system
is undemocratic. In democratic theory, governments and leaders represent inter-
ests expressed by the people, who are sovereign.
Proponents of the dominance model focus on the defects and inefficiencies of
capitalism. They believe that corporations are insulated from pressures holding
them responsible, that regulation by a government in thrall to big business is fee-
ble, and that market forces are inadequate to ensure ethical management. Unlike
other models, the dominance model does not represent an ideal in addition to a
description of how things are. For its advocates, the ideal is to turn it upside down
so that the BGS relationship conforms to democratic principles.
In the United States the dominance model gained a following during the late
nineteenth century when large trusts such as Standard Oil emerged, buying politi-
cians, exploiting workers, monopolizing markets, and sharpening income dispari-
ties. Beginning in the 1870s, diverse groups of plain people who found themselves
toiling under the directives of rich capitalists rejected the market capitalism model
and based a populist reform movement on the critical view of society implied in
the dominance model.
populism Populism is a recurrent spectacle in which common people 1Nho feel oppressed
A political pat• or disadvantaged in some way seek to take power from a ruling elite that thwarts
tern., recurrent
fulfillment of the collective welfare. In America, the populist impulse bred a socio-
in world his-
tory, in w hich political movement of economically hard-pressed farmers, miners, and workers
common peo- lasting from the 1870s to the 1890s that blamed the Eastern business establishment
p le who feel for a range of social ills and sought to limit its power.
oppressed o r This was an era when, for the first time, on a national scale the actions of
disadvantaged powerful business magnates shaped the destinies of common people. Some
seek to take
power from a displayed contempt for commoners. "The public be damned," railroad mag-
ruling elite seen nate William H. Vanderbilt told a reporter during an interview in his luxurious
as thwarting priva te railway car.3 1 The next day, newspapers around the country printed
fulfillment o f his remark, enraging the public. Later, Edward Harriman, the aloof, arrogant
the collective president of the Union Pacific Railroad, allegedly reassured industry leaders
welfare.
worried about reform legisla tion, saying "that he 'could buy Congress' and
that if necessary he 'could buy the judiciary."'32 It was with respect to Harriman
that President Theodore Roosevelt once noted, " men of very great wealth in
too many instances totally failed to understand the temper of the country and
its needs." 33
31 ""Reporter C.P. Dresser Dead," The New York Times. April 25, 1891, p. 7. In fairness to Vanderbilt,
the context of the remark is elusive. It came in response to questioning by a reporter who may have
awakened Vanderbilt at 2:00 a.m. to ask, perhaps insotentty, if he woukt keep an unprofrtable route in
service to the publk. Vanderbilt's response was magnified far beyond a cross retort to become the age's
enduring emblem of arrogant wealth. See "Human Factor Great l ever in Railroading,,. Los Angeles
Times, October 20, 1912, p. V15; and Ashley W. Cole, "A Famous Remark, " The New York Times,
August 25, 19 18, p. 22 (letter to the editor).
12 Quoted from correspondence of Theodore Roosevelt in Maury Klein, The Life & Legend of
E.H. Harriman (Chapel Hill: University o f North Carolina Press, 2000), p. 369.
33 Ibid., p. 363.
16 Business Ethics: Case s. Issues & St ak ehoklers
This 1900
political car-
toon Illustrates
a central theme
of the domi-
nance modal,
that powerful
business Inter-
ests act In
concert with
government to
further selfish
money Inter-
ests. Although
the cartoon is
old. the idea
remains com-
pelling for
many.
Source: C Bett-
mann/Getty
Images.
Df "f1lZ IM..NOS o, HIS C'tu.U.NTHJtOMC f'ltlt:NOti. .'/i }
The p opulis t movement in America ultimately fell short of reforming the BGS
relationship to a democratic ideal. Other industrializing nations, notably Japan,
Marxism had similar populist movements. Marxism, an ideology opposed to industrial
An ideology cap italism, emerged in Europe at about the same time as these movemen ts, and it
holding that also con tained ideas resonant with the dominance model. In cap italist societies,
workers should
revolt against according to Karl Marx, an owner class d ominates the economy and ruling institu-
property- tions. Many business critics worldwide advocated socialist reforms that, based on
owning capi- Marx's theory, could achieve more equitable distribution of power and wealth.
talists who In the United States the d ominance model may have been most accurate in the
exploit them, late 1800s when it first arose to conceptualize a world of brazen corporate power
replacing
economic and and politicians who openly represented industries. However, it remains popular.
political domi- Ralph Nader, for example, speaks its language.
nation with
more equal Over the past 20 years, big business has increasingly dominated our palitical econ-
a nd demo- omy. This con trol by corporate government over our political government is creat-
cratic socialist ing a widening "democracy gap." The unconstrained behavior of big business is
institutions. subordinating our democracy to the control of a corporate plutocracy that knows
few self-imposed limits to the sp read of its power to all sectors of our society. 34
Nader persists in the rhetoric of the d ominance model. Running for p resident in
2008 he wrote tha t "the corporations . .. have become our government .. . [and]
34 · statement of Ralph Nader," in The Ralph Nader Reader (New York: Seven St0<ies Press, 2000), pp. 3 and 4.
FIGURE 1.4
The Counter- Environmental The Public
Catalysts
vailing Forces
Model •Markets • Cultural values
• Geopolitics • Public opinion
• Ideologies •Voting
•Movements • Interest groups
•Technology • Market demands
•Nature • Social classes
• Wars. terrorism • Demographic
• Information media change
Business Government
• Products, services • Constitutions

•Use of • Lows and statutes
technologies • Regulations
• Public relations • Political parties
• Campaign donations • Political leaders
• Government service •Judiciaries
by executives
•lobbying
• Philanthropy
both parties are moving deeper into the grip of global corporatism," 35 later adding
that "corporate power over our political economy and its control over people's
lives knows few boundaries."36
The Countervailing Forces Model

The countervailing forces model, shown in Figure 1.4, depicts the BGS relation-
ship as a flow of interactions among major elements of society. It suggests
exchanges of power among them, attributing constant dominance to none.
This is a model of multiple forces. The power of each element can rise or fall
depending on factors such as the subject at issue, the strength of competing inter-
ests, the intensity of feeling, and the influence of leaders. The countervailing forces
model generally reflects a way of looking at the BGS relationship in the United
States and other Western industrialized nations. It differs from the market capital-
ism model in opening business directly to influence by nonmarket forces. It differs
35 Ralph Nader, " It's Not About Me. It's About Our Broken System." USA Today, March S, 2008, p. 1 I A.
36 Ralph Nader, "Time for Citizens to Convene," Common Dreams.org, September 28, 2009, at
www.commondreams.org.
from the dominance model in rejecting an absolute primacy of business and cred-
iting more power to a combination of forces and interactions rendered paltry by
the dominance model.
What overarching conclusions can be drawn from this model? First, business is
deeply integrated into an open society and must respond to many forces, both
economic and noneconomic. It is not isolated from any part of society, nor is it
always dominant. Markets, for example, have the power to organize human activ-
ity and can operate very independently of corporate influence. Business exerts
power in them, but so do other elements in society. Consumer demand rewards
some business decisions, penalizes others, and forces innovation. Governments
also shape markets, restricting buyers and sellers as to what products can be
exchanged, when, and ho·w.
Second, business is a major force acting on government, the public, and envi-
ronmental factors. Business often defeats labor, wins political battles, and shapes
public opinion. It consumes natural resources. It conditions cultural values, for
example, commercialism and materialism, each encouraged by advertising per-
haps at the expense of values such as temperance and spirituality. Some believe
that among the power groupings in American society business predominates.
However, defeats, compromises, and power sharing are highly visible. For exam-
ple, in the 1970s large corporations fought new environmental regulations only to
see a string of major laws, costly to comply with, adopted by Congress.
Third, to maintain broad public support, business must adjust to social, politi-
cal, and economic forces it can influence but not control. Faulty adjustment invites
correction. This is the social contract in action. For more than 50 years American
business suppressed labor unions. In keeping ""ith the dominance model, govern-
ment acted as its constant ally, even sending troops to end strikes forcibly, some-
times violently. Then, during the depression of the 1930s, the public blamed
economic problems on corporate greed and excesses, electing President Franklin
D. Roosevelt to bring reform. Sympathy for struggling workers was so strong that
in 1935 Congress passed the National Labor Relations Act, protecting and easing
union organizing, a colossal defeat for business and a bitter lesson about the social
contract.
Finally, BGS relationships evolve as changes take place in the ideas, institutions,
and processes of society. After the collapse of financial markets in late 2008, for
stakeholder example, the federal government took unprecedented actions, taking large owner-
An entity that ship shares in big companies, firing the CEO of General Motors, and dictating
is benefitted or executive salaries. Such actions altered the nature of capitalism as practiced in the
burdened b y United States in a way that reduced business power.
the actions of a
corporation or
whose actions The Stakeholder Model
may benefit or The stakeholder model in Figure 1.5 shows the corporation at the center of an
burden the cor- array of relationships "',jth persons, groups, and entities called stakeholders. Stake-
poration. The holders are those whom the corporation benefits or burdens by its actions and
corporation has
an ethical duty those who benefit or burden the firm "',jth their actions. A large corporation has
toward these many stakeholders, all divisible into two categories based on the nature of the re-
entities. lationship. But the assignments are relative, approximate, and inexact. Depending
FIGURE 1.5
The
Educational Media
Stakeholder lnstitution.s
Model
The
Competitors
Poor
Future
Supp4iers
Generations
Corporation
Earth's Trade
Biosphere Assoeiotions
Politicol
Relig ious
Interest
G roups
Groups
& Primary
e' Stakel\olders Polrtieol
Parties
Creditors
primary Union.s
stakeholders Secondary
Entities in a re- Stakel\olders
lationship with
the corporation
in which they,
the corporation, on the corporation or the episode, a few stakeholders may shift from one category
or bo th are to the other.
affected imme- Primary stakelwlders are a small number of constituents for which the impact of
diate ly, contin-
the relationship is mutually immediate, continuous, and powerful. They are usu-
uously, and
powerfully. ally stockholders (o·wners), customers, employees, communities, and governments
and may, depending on the firm, include others such as suppliers or creditors.
secondary Seccmdary stakeholders include a possibly broad range of constituents in which
stakeholders the relationship is one of less immediacy, benefit, burden, or power to influence.
Entities in a re-
Examples are activists, trade associations, politicians, and schools.
lationship with
the corporation This model is based on a gro·wing body of work by academicians who follow
in which the the lead of R. Edward Freeman, a management scholar and ethicist whose seminal
effects on them, 1984 book consolidated rudimentary ideas into a cohesive theory.37 Now the idea
the corporation, seizes the imagination of many, including Pope Benedict XVI who writes of
or bo th are less
significant and
pressing. '7 R. Edward Freeman, Strategic Management: A Stakeholder Approach (Boston: Pitman Publishing, 1984).
"a growing conviction that business management cannot concern itself only with
the interests of proprietors, but must also assume responsibility for all the other
stakeholders who contribute to the life of the business."38
Exponents of the stakeholder model debate how to identify who or what is a
stakeholder. Some use a broad definition and extend the idea to include, for exam-
ple, natural entities such as the earth's atmosphere, oceans, terrain, and living
creatures because corporations have an impact on them.39 Others reject this broad-
ening, since natural entities are defended by conventional stakeholders such as
environmental groups. At the farthest reaches of the stakeholder idea lie groups
such as the poor and future generations. But in the words of one advocate,
"(s)takeholder theory should not be used to weave a basket big enough to hold the
world's misery."40 If groups such as the poor were included in the stakeholder
network, managers would be morally obliged to run headlong at endless prob-
lems, taking them beyond any conceivable economic mission. Still, any group be-
comes a stakeholder simply by attacking the reputation and image of the
corporation. Political activism equals right to consideration.
The stakeholder model reorders the priorities of management away from those
in the market capitalism model. There, the corporation is the private property of
those who contribute its capital. Its top priority is to benefit one group-the inves-
tors. The stakeholder model, by contrast, removes this priority, replacing it with
an ethical theory of management in which the welfare of each stakeholder must be
considered as an end. Stakeholder interests have intrinsic worth: They are not to
be valued only as they enrich investors. Managers have a duty to consider the in-
terests of multiple stakeholders, and thus, "the interests of shareo·wners ... are not
always primary and never exclusive." 41 Beyond this, other ethical duties that have
been suggested include avoiding harm, justifying decisions, and protecting future
generations. 42
The stakeholder theory is at heart a political ideology that regards traclitional
capitalist corporate governance as akin to an undemocratic political system in
which the "population" of stakeholders is not given proper representation. With-
out checks and balances autocratic managers will be tempted by greed into
various degrees of economic oppression, treating the un- and underrepresented
stakeholders unfairly. The ethical concept of duties introduces such a mechanism
of representation. Stakeholder management creates duties toward multiple
38 Benedictus PP.XVI. Encyclical Leiter, Caritas in Veritate (2009), no. 40.

39 See Edward Stead and Jean Garner Stead. "Earth: A Spiritual Stakeholder,· Business Ethics Quarterly,
Ruffin Series no. 2 (2000). pp. 321-44.
• 0 Max Clarkson. A Risk-Based Model of Stakeholder Theory (To,onto: The Centre for C0<p0<ate Social
Performance & Ethics, 1994). cited in Robert Philips, Stakeholder Theory and Organiz ational Ethics (San
Francisco: Berrell-Koehler. 2003). p. 119. See also James P. Walsh, ··raking Stock of Stakeholder
Management," Academy of Management Review 30, no. 2. p. 205.
41
James E. Post. l ee E. Preston. and Sybille Sachs, Redefining the Corporation: Stakeholder Management
and Organizational Wealth (Stanford, CA: Sta nfo,d University Press, 2002). p. 17.
42 For a list
of ethical duties toward stakeholders see Advisory Panel, Newmont Community Relationships
Review, Building Effective Community Relationships: Final Report of the Advisory Panel to Newmont's
Community Relationship Review, February 8, 2009, appendix 7.
entities of the corporation-duties not emphasized in the traditional capitalist

firm, which tries to dominate its environment out of an obsessive focus on enrich-
ing stockholders. Management must raise its gaze above profits to see and re-
spond to a spectrum of other values; it must manage to make each stakeholder
"better off."43 The stakeholder model is intended to "revitalize capitalism" ·with a
"new conceptualization" of how the corporation should work. 44 It rejects the
shareholder-centered view of the firm in the market capitalism model as "ethically
unacceptable."45
Not everyone agrees. Critics argue that the stakeholder model is an unrealistic
assessment of power relationships between the corporation and other entities. It
seeks to give power to the powerless by replacing force with ethical duty, a time-
less and often futile quest of moralists. In addition, it sets up too vague a guideline
to substitute for the yardstick of pure profit. Unlike traditional criteria such as re-
turn on capital, there is no single, clear, and objective measure to evaluate the
combined ethical/economic performance of a firm. According to one critic, this
Jack of a criterion "would render impossible rational management decision mak-
ing for there is simply no way to adjudicate between alternative projects when
there is more than one bottom line."46
In addition, the interests of stakeholders so vary that often they conflict with
shareholders and with one another. With respect to corporate actions, laws and
regulations protect stakeholder interests. Creating surplus ethical sensitivity that
soars above legal duty is impractical and unnecessary.47 And finally, a lasting con-
viction, going back to Adam Smith, is that even the most fanatical pursuit of profit,
if guided by Jaw and the invisible hand, creates greater lasting good for society
than pursuit of profit tempered by compassion. If a new conception of capitalism
redistributes decision-making power and resources to stakeholders it can only
impair the efficiency of the firm in maximizing both profits and social benefits.48
Some puzzles exist in stakeholder thinking. It is not always clear who or what
is a legitimate stakeholder, to what each stakeholder is entitled, or how managers
should balance competing demands among a range of stakeholders. Yet its advo-
cates find two arguments compelling. First, a corporation that embraces stake-
holders prospers more, better sustaining its wealth-creating function with the
support of a network of parties beyond shareholders. Put bluntly by an advocate
of the stakeholder perspective, "(e]xecutives ignore stakeholders at the peril of
the survival of their companies."49 Second, it is the ethical way to manage because
stakeholders have moral rights that grow from the way powerful corporations
43 R. Edward Freeman, Jeffrey S. Harrison, and Andrew C. Wids, Managing for Stakeholders: Survival,
Reputation, and Success (New Haven: Yale University Press. 2007). p. 12.
44
Freeman, Harrison, and Wicks, Managing for Stakeholders, pp. x and 3.
45 Post. Preston, a nd Sachs, Redefining the Corporation, p. 16.
46 John Argenti, '"Stakeholders: The Case Against, .. Long Range Planning, June 1997, p. 444.
47 Anant K. Sundaram, ··rending to Shareholders,· Financial Time~ May 26, 2006, p. 6.
"'James A. Stieb, ·· Assessing Freeman~ Stakeholder Theory," Joumal of Business Ethics, 87 (2009), p. 410.
49 R. Edward Freeman, '"The Wal-Mart Effect and Business, Ethics, and Society, - Academy of
Management Perspectives, August 2006, p. 40.
affect them. Despite academic debates, in practice the stakeholder ideology has
been powerful enough to change the way capitalist corporations are managed.
Most of the largest global corporations now analyze their stakeholders and enter
into dialogue with a wide range of them. This trend is discussed in Chapter 6.
OUR APPROACH TO THE SUBJECT MAI I EK

Discussion of the business-government-society field could be organized in many
ways. The following is an overview of our approach.
Comprehensive Scope
This book is comprehensive. It covers many subjects. We believe that for those
new to the field seeing a panorama is helpful. Because there is Jess depth in the
treatment of subjects than can be found in specialized volumes, we suggest addi-
tional sources in footnotes.
Interdisciplinary Approach with a Management Focus

The field is exceptionally interdisciplinary. It exists at the confluence of a fairly
large number of established academic disciplines, each of which contributes to
its study. These disciplines include the traditional business disciplines, particu-
larly management; other professional disciplines, including medicine, Ja·w, and
theology; the social sciences, including economics, political science, philosophy,
history, and sociology; and, from time to time, natural sciences such as che-
mistry and ecology. Thus, our approach is eclectic; we cross boundaries to find
insight.
strategic The dominant orientation, however, is the discipline of management and,
management within it, the study of strategic management, or actions that adapt the company to
Actions taken
by managers its changing environment. To compete and survive, firms must create missions,
to adapt a purposes, and objectives; the policies and programs to achieve them; and the
company to methods to implement them. We discuss these elements as they relate to corporate
changes in its social performance, illustrating successes and failures.
market and
sociopolitical Use of Theory, Description, and Case Studies
environments.
Theories simplify and organize areas of knowledge by describing patterns or regu-
theory larities in the subject matter. They are important in every field, but especially in
A statement or this one, where innumerable details from broad categories of human experience
vision that intersect to create a new intellectual universe. Where theory is missing or weak,
creates insight
by describing scholarship must rely more on description and the use of case method.
patterns or rela- No underlying theory to integrate the entire field exists. Fortunately, the com-
tionships in a munity of scholars studying BGS relationships is building theory in several areas.
diffuse subject The first is theory describing how corporations interact with stakeholders. The
matter. A good second is theory regarding the ethical duties of corporations and managers. And
theory is con-
cise and simpli- the third is theory explaining corporate social performance and how it can be
fies complex measured. Theory in this last area focuses on defining exactly what a firm does to
p henomena. be responsible in society and on creating scales and rulers with which to weigh
23
and measure its actions. Scholarship in all three areas shows increasing sophistica-
tion and wider agreement on basic ideas.
Despite the Jack of a grand theory to unify the field, useful theories abound in
related disciplines. For example, there are economic theories about the impact of
government regulation, scientific theories on the risks of industrial pollution,
political theories of corporate power, ethical theories about the good and evil in
manager's actions, and legal theories on subjects such as negligence applied by
courts to corporations when, for example, industrial accidents occur. When
fitting, we discuss such theories; elsewhere we rely on descriptions of events. In
each chapter, we also use stories at the beginning and case studies at the end to
invite discussion.
Global Perspect ive

Today economic globalization animates the planetary stage, creating movements
of people, money, goods, and information that, in tum, beget conflicts as some
benefit more and others Jess or not at all. Viewing any nation's economy or busi-
nesses in isolation from the rest of the world is myopic. Every government finds
its economic and social welfare policies judged by world markets. Every corpora-
tion has a home country, but many have more sales, assets, and employees outside
its borders than within. For n01N, capitalism is ascendant. It brings unprecedented
wealth creation and new material comforts, but it also brings profound risks of
economic shocks, imposes burdens on human rights and the environment, and
challenges diversity of values for those who stand aloof from the free market con-
sensus. A fitting perspective on the BGS relationship must, therefore, be global.
Historical Perspective
history History is the study of phenomena moving through time. The BGS relationship
The study of is a stream of events, of which only one part exists today. Historical perspective
phenomena is important for many reasons. It helps us see that today's BGS relationship is
moving through
time. not like that of other eras; that current ideas and institutions are not the only
alternative; that historical forces are irrepressible; that corporations both cause
and adapt to change; that our era is not unique in undergoing rapid change; and
that we are shaping the future now. In addition, the historical record is rela-
tively complete, revealing more clearly the lessons and consequences of past
events as compared with current ones that have yet to play out and show their
full significance.
Despite appearances of novelty, the present is seldom unparalleled and is best
understood as an extension of the past. So we often examine the origins of current
arrangements, finding them both enlightening and entertaining. Readers of this
book, many at the beginning of Jong business careers, can take heart from the
words of Nicolo Machiavelli, a student of history who believed that "whoever
·wishes to foresee the future must consult the past; for human events ever resemble
those of preceding times."50
50 Niccolo Machiavelli, Discourses on the First Ten Books of Titus Livius (New York: The Modern Library,
1950). book 3, chapter 43, p. 530, written in 1513.
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Fig. 94.—Armoiries de la famille Michel. Données par le représentant de la branche aînée, M. S.
Michel de Monthuchon.
VI.
L’ORDRE MILITAIRE DE SAINT-MICHEL.

endant que la France humiliée subissait le joug d’un vainqueur
impitoyable, tous les regards s’étaient tournés vers le Mont-Saint-
Michel pour implorer le secours de l’ange des batailles; après
l’expulsion des Anglais, les mêmes regards se portèrent de nouveau
sur la sainte Montagne pour remercier l’ange de la victoire. L’enthousiasme
était universel, et jamais peut-être l’affluence des pèlerins n’avait été plus
considérable. Guillaume d’Estouteville favorisa ces pieuses manifestations,
en obtenant des faveurs signalées pour ceux qui visiteraient le Mont et
contribueraient par leurs aumônes à la restauration de la basilique. «Par ce
moyen, dit dom Huynes, comme aussy avec l’ayde du revenu de l’abbaye,
on commença à rebastir le haut de l’église,...... non pas comme auparavant,
mais si superbement et avec tant d’artifice que si on eut voulu continuer à
faire bastir le reste de l’église de mesme façon, on n’en eut pu voir en France
une plus belle pour la structure.» En effet, la hardiesse et la force de cet
édifice, la majesté de l’ensemble et la perfection des détails, l’élégance et la
pureté du style en font l’un des plus beaux chefs-d’œuvre de l’architecture
du quinzième siècle. La crypte avec ses piliers robustes, ses nervures
prismatiques, et ses chapelles rangées autour du rond-point, saisit l’âme
d’étonnement et de respect. Le jour y pénètre à peine par l’étroite ouverture
des fenêtres trilobées, et vient s’unir à la lumière mystérieuse des lampes qui
brûlent autour de l’image de la Vierge, devant laquelle les pèlerins viennent
s’agenouiller, unissant comme autrefois le culte de l’Archange à celui de la
Mère de Dieu. La partie supérieure, avec ses colonnes élégantes, ses voûtes
élancées, ses larges ouvertures et sa forêt de clochetons, rappelle le beau
nom de palais des anges que nos pères aimaient à donner au Mont-Saint-
Michel. Cet édifice, aux proportions vraiment gigantesques, resta inachevé.
Guillaume d’Estouteville, dans sa visite au monastère en 1452, fit cesser les
constructions pour travailler à enrichir l’intérieur de la basilique.
A cette époque les pèlerins non seulement de France, mais aussi des
autres nations, affluaient sans cesse dans la cité de l’Archange. A leur tête,
on vit l’épouse de Charles VII, la reine Marie, et plusieurs princes qui
s’étaient illustrés pendant la guerre de cent ans. Pour favoriser cet élan
universel, le pape Eugène IV avait accordé une indulgence plénière à ceux
qui visiteraient la basilique le jour de la fête de Saint-Michel. En vertu d’un
autre privilège concédé par Pie II à Guillaume d’Estouteville et à ses
successeurs, deux des prêtres séculiers ou réguliers chargés du pèlerinage
pouvaient absoudre de toutes les censures de l’Église.
Il est rapporté que, l’an 1450, François Iᵉʳ, duc de Bretagne, vint au Mont
après la prise d’Avranches et de Tombelaine sur les Anglais. Il y séjourna
huit jours et dans l’intervalle il fit célébrer un service funèbre pour Gilles,
son frère, dont il était peut-être le meurtrier. A la sortie de la ville, un vieux
moine accosta, dit-on, le duc de Bretagne et lui prédit que dans quarante
jours il paraîtrait au tribunal de Dieu, pour rendre compte du sang de son
frère: «Il n’y manqua pas, ajoute un historien, car au bout du terme il
mourut.»
L’Allemagne et la Belgique s’ébranlèrent aussi, et, dans le cours des
années 1457 et 1458, on vit des bandes d’hommes, de femmes et d’enfants
partir des bords du Rhin et s’acheminer bannière en tête vers le sanctuaire de
l’Archange. Un auteur contemporain, Jacques du Clercq, nous a laissé une
description intéressante de ces manifestations religieuses: «Environ le
caresme et après Pasques, l’an 1458, écrit-il dans ses Mémoires, grande
multitude d’Alemans et de Brabanssons et d’aultres pays, tant hommes que
femmes et enfans en très-grand nombre, par plusieurs fois passèrent par le
pays d’Artois, et les pays d’environ, et alloient en pélerinage au Mont-Saint-
Micquel, et disoient que c’estoit par miracles que monsieur saint Micquel
avoit fait en leur pays: entre aultres choses ils racomptoient que ung homme
mourut soudainement en battant son enfant, parce que l’enfant vouloit aller
au Mont-Saint-Micquel: ils disoient que monsieur saint Micquel le avoit fait
mourir; aulcuns disoient aussy que communément cette volonté leur venoit
et ne sçavoient pourquoy sinon que nullement ne pourroient avoir repos, par
nuit, qu’ils n’euissent volonté de aller visiter le saint lieu du Mont-Saint-
Micquel, et en y passa des milliers par plusieurs fois.» Les savants d’outre-
Rhin s’en émurent et plusieurs écrivirent pour empêcher ces «migrations»
lointaines et ces pèlerinages entrepris sous la neige, malgré les difficultés de
la route et les rigueurs de l’hiver.
Comme toutes les grandes manifestations religieuses, celle-ci fut signalée
par des prodiges éclatants. Le 15 octobre, veille de la dédicace du mont
Tombe, une femme du diocèse de Rennes fut surprise par la marée et
ensevelie sous les flots; mais, disent les annalistes, «il plut au glorieux
Arcange saint Michel la prendre sous sa protection et bien que la mer
l’environnast de ses ondes de tous costez,» elle n’en fut pas atteinte, et,
quand les eaux se furent retirées, un laboureur d’un village voisin «la porta
en sa maison, fit allumer un (grand) feu et la mit reschauffer auprès;» peu à
peu, «par la charité de ce bon homme,» elle «recouvra ses forces, commença
à parler et à raconter ses désastres.» Des hommes dignes de foi, «Thomas
Verel, inquisiteur, Jean Naudet, Jean Fouchier et Estienne de la Porte,»
docteurs en théologie, ayant examiné ce prodige, n’hésitèrent pas à le classer
parmi les miracles sans nombre opérés par l’intercession de l’Archange.
Parfois, disait-on, une clarté surnaturelle environnait la cime de la montagne,
et saint Michel apparaissait dans les airs sous la forme d’un guerrier. Enfin,
comme le rapporte Jacques du Clercq, un homme des environs de Liège fut
puni de mort dans les circonstances suivantes: son fils s’était réuni à trois
autres petits pèlerins qui venaient au mont Tombe, il courut à sa poursuite et
le saisit par les cheveux en disant: «Retourne, au nom du diable.» Cet
homme, observe un écrivain, prenait un mauvais «advocat,» car il ne pouvait
rien espérer du démon, «l’ennemy de l’Arcange» aux inspirations duquel son
fils correspondait. «A peine avait-il proféré les dernières syllabes de ce
blasphème exécrable, qu’il tomba roide mort par terre et ne dit oncques
depuis un seul mot.» Tous ces signes de la protection de saint Michel
entretenaient et augmentaient la confiance des populations; aussi, d’après les
anciens chroniqueurs, le nombre des pèlerins était si considérable qu’on ne
pouvait pas même compter les enfants qui visitaient chaque année le Mont-
Saint-Michel.
En 1462, le successeur de Charles VII, Louis XI, accomplit son premier
pèlerinage au sanctuaire de l’Archange; il était environné de toute la pompe
royale et fit son entrée dans la ville à la tête d’une brillante escorte; il donna
aux religieux six cents écus d’or, et, de retour à Paris, il envoya pour l’église
une statue de saint Michel et une chaîne qu’il avait portée pendant son exil.
Le même souverain permit «d’ajouter le chef de la maison de France aux
armoiries» du monastère. D’après Jean de Troyes, Louis XI fit un autre
voyage au Mont-Saint-Michel en 1467: «Et avecques lui fist mener quantité
de son artillerie, et si aloient avecques lui grant nombre de ses gens de
guerre.» Toutes ces manifestations solennelles nous montrent quelle était
après la guerre de cent ans la renommée du pèlerinage national de la France;
cependant Louis XI devait ajouter une nouvelle gloire à la cité de
l’Archange.
Les ordres militaires du moyen âge avaient eu pour saint Michel une
dévotion spéciale; quelques-uns même l’avaient choisi pour chef et
protecteur, par exemple, en Portugal. Les chevaliers l’invoquaient sur le
champ de bataille, et reconnaissaient en lui l’Archange guerrier; ils aimaient
aussi à reposer sous sa garde en attendant l’heure du jugement suprême:
ainsi dans les caveaux de Rhodes, l’image de saint Michel est plusieurs fois
représentée avec ses attributs de gardien des sépulcres, de conducteur et de
peseur des âmes. Depuis longtemps, Louis XI avait résolu, de son côté,
d’établir un Ordre de chevalerie pour honorer le patron de la France et
perpétuer le souvenir des glorieux événements dont le mont Tombe avait été
le théâtre pendant la guerre de cent ans. Il mit son projet à exécution en
1469, au château d’Amboise (fig. 95).
Le Mont-Saint-Michel servit pour ainsi dire de berceau à cet ordre
fameux dont chaque membre devait être un type de bravoure, un modèle de
distinction et un exemple de dévouement. Cette noble origine est clairement
indiquée dans les lettres patentes écrites à la date du 1ᵉʳ août 1469; le roi
s’exprime en ces termes: «Loys, par la grâce de Dieu roy de France, sçavoir
faisons à tous, presens et advenir, que pour la très parfaicte et singulière
amour qu’avons au noble Ordre et estat de Chevalerie, dont par ardente
affection, désirons l’honneur et augmentation; à ce que selon nostre entier
désir, la saincte foy catholique, l’estat de nostre mère saincte Église, et la
prospérité la chose publicque, soyent tenuz, gardées et defendues, ainsi qu’il
appartient; Nous à la gloire et louenge de Dieu nostre créateur tout puissant
et révérence de sa glorieuse Mere, et commémoration et honneur de
Monsieur sainct Michel Archange, premier Chevalier, qui pour la querelle
de Dieu victorieusement batailla contre le Dragon, ancien ennemy de nature
humaine, et le trébucha du ciel; et qui son lieu et oratoire, appelé le Mont
Sainct Michel, a tousiours seurement gardé, préservé et défendu, sans estre
pris, subjugué ne mis és mains des anciens ennemis de nostre Royaume: et
afin que touts les bons, haults et nobles couraiges soyent esmeuz et incitez à
œuvres vertueuses, le premier jour du mois d’Aoust, l’an de grace mil quatre
cens soixante neuf, et de nostre règne le IX, en nostre Chastel d’Amboyse,
avons constitué, créé, prins et ordonné, et par ces présentes constituons,
créons, prenons et ordonnons, un Ordre et fraternité de Chevalerie, ou
aimable Compagnie de certain nombre de Chevaliers: lequel Ordre nous
voulons estre nommé l’Ordre de sainct Michel, en et soubs la forme,
condition, statuts, ordonnances, et articles cy après escripts.»
Les premiers statuts, au nombre de soixante-six, renferment des détails
intéressants sur la constitution intime de l’ordre militaire de Saint-Michel.
Les membres, qui ne devaient pas être plus de trente-six, étaient choisis
parmi les «gentilshommes de nom et d’armes, sans reproche,» vaillants,
prud’hommes et vertueux. Avant d’être élu, il fallait renoncer à toute dignité
semblable; toutefois les empereurs, rois et ducs pouvaient appartenir aux
ordres dont ils étaient chefs, avec l’autorisation des souverains de la nouvelle
chevalerie, c’est-à-dire de Louis XI et de ses successeurs. Après d’amples
informations, le monarque choisit quinze chevaliers, tous hommes de «bons
sens, vaillance, preud’hommie et autres grandes et louables vertus;» savoir:
Charles, duc de Guyenne, frère du roi, Jean, duc de Bourbonnais et
d’Auvergne, cousin du roi, Louis de Luxembourg, comte de Saint-Pol et
connétable de France, André de Laval, maréchal de France, Jean, comte de
Sancerre, Louis de Beaumont, seigneur de la Forêt et du Plessis-Macé, Jean
d’Estouteville, seigneur de Torcy, Louis de Laval, seigneur de Châtillon,
Louis de Bourbon, comte de Roussillon,
Fig. 95.—Réception d’un chevalier de l’ordre de Saint-Michel, créé par Louis XI, au château
d’Amboise le 1ᵉʳ août 1469. Fac-simile d’une miniature des Statuts de l’Ordre, daté du Plessis-les-
Tours, ms. du seizième siècle. Bibl. de M. Ambr. Firmin-Didot.
amiral de France, Antoine de Chabannes, comte de Dammartin, grand maître

d’hôtel de France, Jean d’Armagnac, comte de Comminges, maréchal de
France et gouverneur du Dauphiné, Georges de la Trémouille, seigneur de
Craon, Gilbert de Chabannes, seigneur de Courton, sénéchal de Guyenne,
Louis, seigneur de Crussol, sénéchal de Poitou, et Tanneguy-du-Châtel,
gouverneur des pays de Roussillon et de Sardaigne.
Pour notifier à un chevalier son admission dans l’ordre de Saint-Michel,
le roi lui envoyait «un collier d’or, fait (de) coquilles lacées l’une avec
l’autre, d’un double (lacs), assises sur (chaînettes) ou mailles d’or, au milieu
duquel sur un roc (pendait) un imaige d’or de Monsieur sainct Michel,» avec
la devise: «Immensi tremor Oceani,» il est la terreur du vaste Océan:
«Pour dompter la terreur des démons et de l’onde,

«Qui nous peut plus ayder que cet Archange au monde!»
Le souverain et les chevaliers de l’Ordre devaient porter ce collier à

découvert sur leur poitrine, sous peine de faire dire une messe et de donner
une aumône de sept «solz six deniers tournoiz;» cependant, à l’armée, en
voyage, dans leurs maisons ou à la chasse, ils pouvaient porter une simple
médaille de saint Michel attachée à une chaîne d’or, ou à un cordonnet de
soie noire; mais ils ne devaient jamais quitter ce dernier insigne, même dans
les plus grands dangers et pour sauver leur vie. Le grand collier était du
poids de deux cents écus d’or, sans pierres précieuses ni ornements superflus
(fig. 96); il appartenait à l’Ordre et il était remis au trésorier après la mort de
chaque membre.
La fraternité la plus cordiale régnait entre le souverain et les chevaliers;
ils se prêtaient un mutuel appui, et travaillaient ensemble au maintien de la
paix et à la prospérité du royaume; avant d’entreprendre une guerre, ils
prenaient conseil de leurs frères, et, s’ils étaient Français, ils ne
s’engageaient point au service d’un autre prince et ne faisaient jamais de
longs voyages sans la permission du roi; d’autre part, les membres étrangers
ne devaient pas prendre les armes contre la France, sinon dans les cas
exceptionnels où ils ne pouvaient s’en dispenser; alors tout chevalier qui
faisait un confrère prisonnier de guerre, lui rendait la liberté. Le roi, de son
côté, s’engageait à protéger les membres de l’ordre, à les maintenir dans
leurs privilèges, et à n’entreprendre aucune guerre, ni aucune affaire
importante sans avoir leur avis, sauf dans les circonstances où il fallait agir
en secret et sans retard. Il était défendu sous la foi du serment de révéler les
entreprises sur lesquelles le souverain avait consulté les chevaliers.
Fig. 96 et 97.—Collier de l’ordre de Saint-Michel et médaille de pèlerin de Notre-Dame de Boulogne,

portant sur le revers le collier de l’ordre de Saint-Michel, disposé selon la prescription des statuts
royaux de 1469.
Tout membre convaincu d’hérésie, de trahison ou de lâcheté, devait être

dépouillé de ses insignes et rayé de la liste des frères; parfois même, il était
condamné à la peine capitale. Nous en avons un exemple frappant dans la
personne du connétable de Saint-Pol: comme il s’était rendu coupable du
crime de lèse-majesté, il fut condamné à mort et amené au palais du
Parlement. Au moment où il entrait, dit Philippe de Commines, le chancelier
lui adressa ces paroles: «Monseigneur de Saint-Pol, vous avez été par cy-
devant, et jusqu’à présent réputé le plus ferme et le plus constant chevalier
de ce royaume, et puis donc que tel avez été jusqu’à maintenant, il est encore
mieux requis que jamais que ayez meilleure constance que oncques vous
eutes.» On lui enleva ensuite le collier de Saint-Michel dont il était décoré,
et on lui lut la sentence qui le déclarait «crimineux» et le condamnait à mort:
«Dieu soit loué, répondit le connétable; véez bien dure sentence; je lui
supplie et requiers qu’il me donne la grace de le bien connoitre
aujourd’huy.» Au contraire, tout chevalier fidèle à ses engagements était
environné d’honneur pendant sa vie, et, à sa mort, le dernier frère reçu dans
l’Ordre faisait chanter vingt messes et donnait six écus d’or en aumône pour
le repos de son âme.
Les articles XIX et XX sont conçus en ces termes: «Pour la très
singulière confiance et dévotion qu’avons à Monsieur saint Michel, premier
chevalier, qui pour la querelle de Dieu victorieusement batailla, et qui son
lieu et oratoire à tousiours gardé et défendu, sans estre prins ne subjugué des
anciens ennemis de la couronne de France, et est invincible; Et soubs le nom
et tiltre duquel est par Nous ce présent Ordre fondé et institué: Nous avons
institué et ordonné, que tous divins services, et autres cérémonies
Ecclésiastiques, biens faicts et fondations qu’entendrons faire, et qui se
feront, tant par Nous, que par nos successeurs Souverains de l’Ordre, et les
frères et Chevaliers d’iceluy, se feront, célébrèront et emploiront au lieu et
Église du Mont sainct Michel: lequel lieu nous élisons et ordonnons, tant
pour les choses dessusdites, qu’autres; ainsi qu’après sera déclaré.... Au
cueur de ladicte Église, seront ordonnez sièges, ausquels seront le Souverain
et lesdicts Chevaliers de l’Ordre, quand ilz seront illec rassemblez: et au-
dessus desdicts sièges, contre le mur, premièrement dessus le siège du
Souverain, sera mis et affiché l’escu de ses armes, et dessus son heaulme et
timbre, et subséquemment de chacun desdicts chevaliers, en gardant l’ordre
de préférence.»
Les assemblées générales où se traitaient les plus graves intérêts de
l’ordre devaient se tenir le jour de la fête de saint Michel. La veille, tous les
membres se présentaient devant le souverain à l’heure des vêpres, et allaient
ensemble à l’Église revêtus de manteaux de damas blanc traînant à terre,
«brodez» d’or, avec des coquilles «d’or» et lacs d’amour en broderie et
«fourrez d’hermines,» la tête couverte d’un chaperon
Fig. 98.—Chapitre de l’ordre de Saint-Michel, tenu par le roi Henri II, en 1548. Fac-simile d’une
gravure des Statuts de l’ordre de Saint-Michel, édition de 1725, appartenant à M. Ed. Corroyer.
de velours cramoisi «à longue cornette.» Le jour de la solennité ils

assistaient à la messe, et, à l’offertoire, ils donnaient une pièce d’or; ensuite
ils dînaient avec le roi; le soir, ils se rendaient de nouveau à l’église pour
entendre les vêpres; mais ils portaient alors un manteau noir et un chaperon
de même couleur, excepté le roi qui était vêtu d’un manteau violet. Les
vêpres étaient suivies de l’office des morts. Le lendemain, à la messe, tous
les chevaliers offraient un cierge d’une livre, auquel leurs armes étaient
attachées; le jour suivant une autre messe était chantée en l’honneur de la
sainte Vierge; mais chaque membre pouvait y assister sans le costume de
l’ordre.
D’après les premiers statuts, le nombre des officiers était de quatre
seulement: le chancelier qui devait être prêtre, le greffier, le trésorier et le
héraut nommé Mont-Saint-Michel. Ce dernier, qu’on appelait aussi «roy
d’armes,» devait être «homme prudent et de bonne renommée, souffisant et
expert;» il portait un émail comme signe de distinction et jouissait d’une
pension de douze cents francs. Sa charge consistait à porter les lettres du
souverain aux frères de l’ordre, à signifier les trépas des membres défunts et
à notifier les nominations faites dans les assemblées générales; il avait aussi
l’obligation de s’enquérir «des prouesses» et hauts faits du souverain et des
chevaliers. A la messe solennelle, le jour de l’assemblée générale, ces
officiers portaient «des robes longues de camelot de soye blanc, fourrez de
menu ver, et des chaperons d’escarlate.» Le 22 décembre 1476 Louis XI créa
un prévôt ou maître des cérémonies, et le chargea d’établir à Paris une
collégiale «pour célébrer, chanter et dire l’office divin, et faire les prières
condignes à obtenir la très bénigne grâce de Dieu nostre Saulveur et
Rédempteur, au moyen de la très vertueuse intercession de (Monseigneur)
sainct Michel, qui continuellement sans intermission» a conduit les affaires
du royaume. A cette occasion vingt-six articles furent ajoutés aux premiers
statuts. Enfin, le 24 du même mois, la fondation de cette collégiale fut
résolue pour dix chanoines, un doyen et un chantre, huit chapelains, six
enfants de chœur, un maître, deux clercs, trois huissiers, un receveur et un
contrôleur; les offices devaient se célébrer dans l’église Saint-Michel du
Palais. Alexandre VI approuva et loua le projet de Louis XI; mais,
contrairement à l’assertion de plusieurs historiens, la chapelle du Palais ne
servit pas de lieu de réunion pour les chevaliers de Saint-Michel.
Pendant de longues années, le nouvel ordre militaire jouit d’une haute
réputation. Non seulement les souverains de France; mais les
Fig. 99.—Martin de Bellay, seigneur de Langey, prête serment de chevalier de Saint-Michel en 1555,
dans la chapelle de Vincennes. Le cardinal de Lorraine tient le livre des Évangiles. Fac-simile d’une
gravure des Statuts de l’Ordre de Saint-Michel, édition de 1725, appartenant à M. Ed. Corroyer.
rois d’Espagne et d’Angleterre, de Suède et de Danemarck, les princes, les
guerriers et les savants les plus illustres ambitionnèrent le titre de chevalier
de Saint-Michel. Cinq rois de France: François Iᵉʳ, Henri II, Charles IX,
Henri III, et Louis XIV modifièrent les règlements de 1469. François Iᵉʳ
remplaça «le double lacs» du collier par «une cordelière»
Comme le Roy donne l’accollade et fait les Chevaliers de Sᵗ Michel le jour qui precede la Ceremonie
de l’ordre du Sᵗ Esprit.
Fig. 100.—Fac-simile de la gravure d’Ab. Bosse.
en mémoire d’Anne de Bretagne, qui l’en avait prié avant de mourir. Ce

prince, dit Brantôme, était très zélé pour son ordre et un jour il fit une
réprimande à un chevalier, qui, étant prisonnier de guerre, avait caché ses
insignes pour n’être pas condamné à une forte rançon. Henri II introduisit
des modifications dans l’habillement des chevaliers. D’après les
ordonnances de ce prince, les simples frères devaient porter «le manteau de
toile d’argent brodé à l’entour de sa devise, savoir trois croissans d’argent
entrelassez de trophées semez de langues et de flammes de feu, avec le
chaperon de velours rouge cramoisi couvert de la même broderie;» le
chancelier avait un manteau de velours blanc et un chaperon de velours
cramoisi; le prévôt et maître des cérémonies, le trésorier, le greffier et le
héraut portaient un manteau de satin blanc et un chaperon de satin cramoisi,
avec une chaîne d’or au bout de laquelle pendait une coquille «d’or.»
Charles IX ordonna de limiter à cinquante le nombre des frères
Fig. 101.—Armoiries de Gabriel de Rochechouart, marquis de Mortemar, créé chevalier de l’ordre du

Saint-Esprit par Louis XIII, à Fontainebleau, le 14 mai 1633. Ces armoiries sont entourées des deux
colliers réunis.
que François II avait beaucoup trop multipliés, au détriment de la chevalerie

et malgré la défense des statuts. Henri III ayant créé l’ordre du Saint-Esprit,
le fondit pour ainsi dire avec celui de Saint-Michel. En effet, tous les
membres de l’ordre du Saint-Esprit prenaient l’ordre de Saint-Michel la
veille de leur réception (fig. 100); ils faisaient entourer leurs armes des deux
colliers réunis et s’appelaient «les chevaliers des ordres du roi (fig. 101).»
Enfin, Louis XIV ajouta treize articles aux statuts rédigés par ses
prédécesseurs, et défendit de porter à plus de cent le nombre des chevaliers,
parmi lesquels devaient être six prêtres âgés au moins de trente ans. D’après
l’article IX, «aucun des confrères» ne pouvait se dispenser de porter la croix
de l’ordre; elle avait la «forme et la figure» de la croix du Saint-Esprit; mais
elle devait être moitié plus petite. La colombe était remplacée par l’image en
émail de saint Michel, que les chevaliers portaient en écharpe avec un ruban
noir. Plus tard, par tolérance, ils attachèrent cette croix avec un ruban bleu «à
la boutonnière du just-au-corps.»
Telle est la constitution de cet ordre fameux, qui dut son origine à
l’héroïsme des défenseurs du mont Tombe, et à la confiance de nos pères
envers le saint Archange. Si le fondateur céda, en l’instituant, aux vues
d’une politique humaine, les statuts qu’il rédigea n’en respirent pas moins un
attachement sincère à la foi catholique et un amour ardent pour la prospérité,
l’honneur et la dignité de la France. Les chevaliers ne marchèrent pas tous
sur les traces des d’Estouteville, mais la plupart se montrèrent dignes des
marques de distinction et des privilèges dont le souverain les gratifia; fiers
d’être enrôlés sous l’étendard de saint Michel, ils honorèrent dans leur
céleste patron l’ange des batailles ou le prince de la lumière, le type de la
bravoure ou le protecteur des sciences et des lettres; on compta parmi eux
des guerriers et des savants. Cet ordre, malgré des siècles de gloire, ne
trouva pas grâce aux yeux de la révolution; rétabli sous Louis XVIII et
Charles X, il fut aboli de nouveau, et, depuis la mort de son dernier
représentant, monsieur de Mortemar, il partage le sort des grandes et nobles
institutions du moyen âge.
VII.
APOGÉE DU CULTE DE SAINT-MICHEL.

ien des fois, dans l’histoire du culte de saint Michel, un fait
remarquable a dû frapper le lecteur: dans les circonstances solennelles,
au moment où se formait notre unité nationale, dans les dangers
extrêmes et à l’heure du triomphe, la dévotion des Français prenait comme
un nouvel élan, la confiance grandissait, de nombreuses caravanes
s’acheminaient vers le mont Tombe, des confréries s’établissaient, des
temples et des autels s’élevaient sous le vocable de l’Archange. Après la
guerre de cent ans, la France venait d’échapper au plus grand des périls et sa
victoire était complète; aussi, jamais le nom de saint Michel ne fut environné
de plus d’honneur; jamais son culte ne fut plus populaire, ni plus universel.
Non seulement en France, mais chez toutes les nations chrétiennes, à
Byzance et à Moscou, des princes et des guerriers, des familles illustres, des
magistrats, des prêtres, des artistes portaient le nom de Michel; la fête de
l’Archange était une date célèbre que l’on choisissait
Fig. 102.—Méreau (face et revers) de la corporation des pâtissiers-oublieurs. Quinzième siècle.
pour tenir des cours plénières, pour rendre la justice, contracter des
obligations, élire un nouveau domicile ou entreprendre une affaire
importante; à côté de l’ordre militaire de Saint-Michel, plusieurs
corporations ouvrières, les ajusteurs de balances, les chapeliers, les étuvistes,
les boulangers, les pâtissiers-oublieurs et plusieurs autres prirent saint
Michel comme patron; dans la ville d’Argentan, les tanneurs se placèrent
sous la protection de l’Archange qui avait, dans leur pensée «tanné la peau
du diable» quand il le précipita du haut des cieux. Ces corporations, surtout à
Paris, gravaient sur les méreaux l’image du saint patron (fig. 102),
célébraient sa fête avec pompe, et devaient envoyer tous les ans une
députation en pèlerinage au mont Tombe.
Mais avant tous ces patronages, presque sur la ligne de la chevalerie,
nous devons placer les nombreuses confréries qui s’établirent sur divers
points de la France, spécialement dans la province de Normandie, sous le
nom bien connu de Charités. Ces pieuses associations, qui existent encore en
certaines paroisses, ont pour but l’ensevelissement des morts, et
reconnaissent pour patron l’Archange, gardien des sépultures, conducteur et
peseur des âmes (fig. 103). Il est curieux et instructif à la fois d’en étudier la
nature, afin de bien comprendre quelle était alors l’influence du culte de
saint Michel. Bernay, Menneval et quelques autres paroisses du diocèse
d’Évreux ont probablement servi de berceau à ces confréries, dont l’origine
semble remonter à une peste qui ravagea le pays en 1080. Comme la plupart
des habitants avaient pris la fuite pour échapper au terrible fléau, un petit
groupe de personnes de toutes les classes de la société se réunit pour
inhumer les morts, et forma une association sous le vocable de saint Michel.
D’après un manuscrit du seizième siècle, voici quels étaient les règlements
de la Charité de Menneval, fondée par «J. Planquette, esquevin, J. Bolquier,
prévost, et J. Dumoutier.»
Quiconque voulait «bénignement» faire partie de ladite Charité, soit
homme ou femme, devait être «puissant de corps pour gaigner sa vie» et
n’avoir encouru aucune excommunication; de plus il payait dix deniers
tournois au moment de la réception, et autant aux deux principales fêtes de
saint Pierre et à la Saint-Michel. Ces mêmes jours de solennité, on chantait
une messe «à diacre et sous-diacre» pour le «salut de l’âme des frères et
bienfaiteurs tant vifs que trépassés.»
L’association était gouvernée par un échevin, un prévôt et treize frères ou
servants, tous gens «prudhommes et loyaux.» A chacune des trois fêtes
désignées, les treize frères ou officiers, portant des torches de cire du poids
de deux livres, allaient «quérir» l’échevin, le conduisaient à l’église pour les
premières vêpres et la messe, et le ramenaient à son hôtel, après la fin de la
cérémonie; ils pouvaient en cette circonstance «porter croix, campenelle et
bannière de la frairie par toutes les paroisses.»
Le placebo et le dirige de l’office des morts devaient être chantés par sept
chapelains; on pouvait cependant se contenter d’un seul dans les cas
extraordinaires, par exemple dans les grandes mortalités. Le luminaire pour
les trépassés était de quatre gros cierges de trois livres, qui brûlaient autour
du corps, et de deux autres d’une livre pour l’autel. Si un frère servant «allait
de vie à trépas,» il était accompagné de sa demeure à l’église et de l’église
au cimetière par deux officiers portant des torches du poids de trois livres; si
le défunt avait rempli les charges de prévôt ou d’échevin, quatre torches
devaient être allumées en son honneur pendant le service. Tous les frères ou
officiers servants étaient tenus «de lever le corps de son hostel» pour le
porter à l’église, où l’on «célébrait une messe solennelle
Fig. 103.—Saint Michel, peseur des âmes. Un homme ayant été transporté en esprit au tribunal de
Dieu, voit, grâce à l’intervention de la sainte Vierge, le poids des bonnes actions l’emporter sur celui
des mauvaises. D’après un ms. du quinzième siècle, peint en camaïeu: Les Miracles de Notre-Dame,
nº 9199, à la Bibl. nat.
à diacre et sous-diacre.» Le même jour, chaque membre faisait dire pour

le frère défunt une messe basse aux frais de la Charité, et treize pains étaient
distribués à treize pauvres devant la fosse du cimetière. A toutes les fêtes, la
confrérie plaçait sur l’autel deux cierges d’une livre, et deux torches de trois
livres étaient tenues par des officiers «à la lévation du corps de Nostre
Seigneur Jesus Christ;» les frères servants donnaient aussi «le pain benoist»
à toute l’assistance, et un clerc était spécialement chargé de servir le prêtre à
l’autel.
Si un membre était «ladre et séparé de la compagnie,» les frères avec «la
croix, campenelle et bannière,» l’accompagnaient jusqu’au lieu où le curé de
la paroisse devait le conduire. Les infirmes qui ne pouvaient plus gagner leur
vie sans mendier, et demandaient des secours à la confrérie, recevaient «six
blancs par semaine.» Ceux qui avaient failli à leur devoir étaient condamnés
à une amende: «les chapelains payaient cinq deniers tournois» et «les frères
serviteurs cinq deniers.»
Dans les temps de grande mortalité, quand le service de la charité
devenait trop difficile et trop «grevable,» les frères ou officiers pouvaient
s’adjoindre des aides. Quatre ou six serviteurs restaient le dimanche à la
table de la recette pour régler après la messe les intérêts de la Charité, et
accueillir les nouveaux frères qui demandaient à entrer dans la confrérie.
Outre les divers ornements d’église, l’association possédait un drap
mortuaire chargé au milieu d’une croix blanche. Sur la bannière on
représentait l’image de l’Archange gardien des sépultures et conducteur des
âmes. Le costume des frères se composait ordinairement d’une soutanelle
assez longue, d’une ceinture noire à frange blanche, d’un rabat en
mousseline, et d’un chaperon qui fut transformé plus tard en barrette
conique; ce chaperon portait, bordés sur le devant, le nom de la paroisse et la
date de l’institution. Sur une écharpe placée en sautoir, on voyait l’image de
saint Michel terrassant le démon.
Dans toutes les confréries on admettait des membres honoraires, qui
prenaient part aux frais et assistaient aux réunions des frères serviteurs, sans
partager leurs modestes et pénibles fonctions; ainsi, dans la commune des
Chambrais les chefs de la famille de Broglie ont toujours compté parmi les
membres honoraires de la Charité. Plusieurs de ces confréries avaient
également un dignitaire appelé roi; son emploi consistait surtout à présider
les réunions générales, à servir de guide aux pèlerins que l’association
députait au Mont-Saint-Michel; au bout d’un an, il devenait prévôt, puis
l’année suivante échevin, et ensuite il rentrait parmi les simples frères; son
costume et celui des deux autres frères dignitaires, se distinguait par la
richesse et les couleurs; il portait, comme le prévôt et l’échevin, un bâton
historié, surmonté d’une petite niche, tandis que les officiers servants
n’avaient à la main que des torches allumées. Un ou deux frères avaient le
titre de sonneurs et convoquaient les membres à la réunion; dans les
enterrements, ils étaient vêtus d’une dalmatique et agitaient une clochette
pour inviter les fidèles à la prière.
D’autres associations non moins florissantes s’étaient établies dans le but
d’honorer l’Archange et de favoriser les pèlerinages au Mont-Saint-Michel.
Leur nombre se multiplia au quinzième siècle, mais pour en trouver

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Business Ethics: Cases, Issues &

Stakeholders (Textbook) 13th Edition

(eBook PDF) Business Ethics: Contemporary Issues and

(eBook PDF) Business and Society: Stakeholders, Ethics,

(eBook PDF) Business and Society: Stakeholders, Ethics,

Business and society : stakeholders, ethics, public

(eBook PDF) Business Ethics Concepts and Cases 8th

Business Ethics: Ethical Decision Making and Cases

(eBook PDF) Business Ethics A Textbook with Cases 9th

(eBook PDF) Business Ethics: Ethical Decision Making &

University of South Florida

CHAPTER 2: THE DYNAMIC ENVIRONMENT ..... . . . . . 25

CHAPTER 3: BUSINESS POWER . ..... ..... . ... 59

CHAPTER 4: CRITICS OF BUSINESS . ..... ..... . . . . . . . 89

CHAPTER 5: IMPLEMENTING SOCIAL RESPONSIBILITY ........... 129

CHAPTER 6: ORGANIZATIONAL ETHICS . . . . . . . . . . . . ... .. . . . . . .. .... 169

CHAPTER 7: MAKING ETHICAL DECISIONS IN BUSINESS .... ..... . 199

CHAPTER 9: SUSTAINABILITY, SUSTAINABLE

CHAPTER 10: MANAGING FOR SUSTAINABILITY . . . . . . . . . . . . 331

CHAPTER 11: MULTINATIONAL CORPORATIONS &

CHAPTER 12: GLOBALIZATION AND BGS RELATIONSIDPS .. ...... 403

CHAPTER 13: REGULATING AND MANAGING INFORMATION

CHAPTER 14: CONSUMERISM.... .... ..... .477

CHAPTER 15: INDUSTRIAL POLLUTION AND ENVIRONMENTAL

CHAPTER 17: THE CHANGING WORKPLACE & EMPLOYEES AND

CHAPTER 18: CML RIGHTS AT WORK & MANAGING A

CHAPTER 1: The Study of

The Study of Business,

2 Chapter 1 The Study of Business, Government and Society

Chapter 1 The Study of Business, Government, and Sodety 3

Birds in Five States,,. press release, August 13, 2009.

4 Chapter 1 The Study of Business, Government and Society

WHAT IS THE BUSINESS-GOVERNMENT-SOCIETY FIELD?

Chapter 1 The Study of Business, Government, and Sodety 5

government Government refers to structures and processes in society that authoritatively

6 Chapter 1 The Study of Business, Government and Society

FIGURE 1.1 How Institutions Support Markets

POLITICAL THE CORPORATIONS

J -- Combine capital and

Impart values. habits, Inform the public

Chapter 1 The Study of Business, Government, and Sodety 1

therefore, be managed to make a profit. A categorical statement of this point comes

WHY IS THE BGS FIELD IMPORTANT TO MANAGERS?

1• Management: Tasks-Responsibilities-Practices (New York: Harper & Row, 1973), p. 40.

8 Chapter 1 The Study of Business, Government and Society

FOUR MODELS OF THE BGS RELATIONSHIP

21 Exxon Shipping Company v. Baker, 128 S.Ct. 2631 (2008).

Chapter 1 The Study of Business, Government, and Sodety 9

10 Chapter 1 The Study of Business, Government, and Society

Chapter 1 The Study of Business, Government, and Society 11

12 Chapter 1 The Study of Business, Government, and Society

The Dominance Model

FIGURE 1.3 Environmental Forces

Chapter 1 The Study of Business, Government, and Society 13

14 Chapter 1 The Study of Business, Government and Society

Df "f1lZ IM..NOS o, HIS C'tu.U.NTHJtOMC f'ltlt:NOti. .'/i }

Chapter 1 The Study of Business, Government, and Society 15

• Products, services • Constitutions

The Countervailing Forces Model

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